Our Daily Brief provides insights into the news and views driving today’s foreign currency exchange rates.
Knock knock As the White House transitions to a mix of green envy and red hatred towards the unconfirmed President-elect Biden, the Dollar remains well bid. Across emerging market currencies the impact of Biden’s win has been unmistakably priced in with currencies such as the Mexican Peso and Chinese Yuan holding onto strong gains. […]
Oil-where is the price heading? The price of WTI is currently drooping at $37.14 and with the USA and Libya due to increase production shortly, that price is unlikely to rise. Combined with OPEC’s forecast that demand for oil is now 2.5 million barrels per day lower for Q4 2020 than the 2019 forecast […]
US Dollar and a Biden Victory Yesterday the market reflected the belief of a likely Biden victory which is expected in turn to cause a period of volatility. Biden is expected to spend large on an economic stimulus and to take a less restrictive approach to international trade which will strengthen other currencies versus […]
To the polls! Today is Election Day in the United States with markets braced for considerable volatility expected through the rest of the week. Only around an hour ago campaigns finished with President Trump walking off a stage in Michigan, concluding his campaign in the same state as he did in 2016. It will […]
At the Start (of what promises to be a bumpy week for markets) Following the major moves last week, it is as well to start with a reminder of where markets finished on Friday night ahead of the US Presidential Election: Oil having fallen by more than 10%, WTI at $35.72. The Dow at […]
US Election With just 11 days to go to the US Presidential Election, every pundit worth his salt is drawing up the market risks and probabilities of the outcome despite the fact that no two elections can be the same. So making the assumption that more than enough has already been expended in the […]
Alphabet It sounds dry stuff at first glance but on closer study smacks of chicanery or at the very least political opportunism. But with the US Department of Justice filing an anti trust case against Alphabet’s Google two weeks before the US Election in which one of the candidates has been outspoken on holding […]
CHF Despite immense currency market intervention, the Swiss Franc has failed to depreciate meaningfully. The Swiss National Bank has conducted forex operations totalling tens of billions of Francs with little impact on the currency’s value. As a currency with safe-haven status, it finds itself the beneficiary of defensive demand during times of uncertainty and […]
Short Biden Today marks three weeks until the US Presidential election. Democratic Presidential Candidate Joe Biden leads rival and incumbent Donald Trump by some 10 percentage points. Some weeks ago, despite a lead in the polls, betting markets were more stubborn to revise the probability of a Biden win upwards. The presupposition of a […]
US Employment Slow progress in the USA in getting people back to work. Last week 840,000 filed for unemployment benefit versus 849,000 the previous week and 665,000 per week during the 2008/9 economic collapse. While drawing encouragement from this apparent plateauing/small fall in the 2020 numbers, markets are under no illusions that without a […]
Trump School of Virology When the President tested positive for Coronavirus markets struggled to price in the potential ramifications. Volatility rose and price signals were far from smooth with the US Dollar eventually rising in a safe-haven bid. The market significance of the President’s hospitalisation is exacerbated by the looming presidential election and any […]
US Dollar Back in the 1990’s the Japanese Yen’s strength based on Japan’s trade position with the USA and the flows of capital inwards to the USA to fund its ballooning deficit, marked the likely direction for the US Dollar versus the other major traded currencies: the GBP, German Deutschmark and Swiss Franc. Until […]
Month & Quarter End In markets, ends matter. Whether the end in question be the end of a working day, a month, quarter and especially calendar or financial year, it brings with it strong underlying trade flows that usually produce both price volatility and significant valuation adjustments. The mechanics of it are extremely simple. […]